A new report from the Thurgood Marshall Institute at the NAACP Legal Defense and Educational Fund, Inc. (LDF) shows how housing and wealth disparities suffered by Black people will result in a disproportionate number of Black folks losing their homes. According to the report, “1 in 4 Black households spend more than half of their income on housing as compared to 1 in 10 White households.” The report further shows how the current economic crisis due to the coronavirus was already proceeded by unstable housing for Black folks that stretches back years. A detailed and holistic approach will have to be taken so that Black folks can recover from the economic downturn caused by COVID-19.
The issues Black people face in terms of housing can be stretched back nearly a century, however, the report listed the 2008 foreclosure crisis as a pivotal moment in which many Black people couldn’t recuperate from housing loss.
“Even after the post-2008 recovery, Black families continued to experience a sharp decline in homeownership, recently hitting a 50-year low in 2017,” the report explained. “Consequently, the decline in homeownership has expanded the Black-White homeownership gap, which shockingly is larger today than it was decades ago when lenders could ‘legally’ discriminate against Black homebuyers.”
According to the report, the foreclosure crisis resulted in Black households losing 33% of their wealth compared to a 12 percent loss for White people between 2007 and 2011. Black folks continue to experience barriers to homeownership, especially in the mortgage lending process. According to the study, 19.3 percent of Black applicants were denied a conventional home loan in 2017, compared to 7.9 percent of White applicants.
For Black renters, the data is just as bleak. Because of a current affordable housing crisis, many low-income households that rent are experiencing an “eviction epidemic,” according to the report. “According to the Urban Institute, nearly 60% of Black households in 2018 rented their homes, and Black renters have greater difficulties than Whites in paying their rent,” the report read.
When COVID-19 hit, the federal government provided some relief on March 18 when the Federal Housing Administration (FHA) implementing an immediate moratorium on foreclosures and evictions for all FHA-insured single-family mortgages. The moratorium also directed servicers “to suspend all evictions of tenants who reside in properties secured by FHA-insured single-family mortgages for a period of 60 days,” according to the report. Another moratorium applied to homeowners with a single-family mortgage backed by the financing enterprises Fannie Mae and Freddie Mac.
On March 27, Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act that superseded the previous guidance issued by the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA). “Under the CARES Act, homeowners with federally backed mortgages have multiple options for mortgage relief,” the LDF report said. “For instance, the CARES Act prohibits lenders and servicers of federally backed mortgages from foreclosing on homeowners for 60 days after March 18, 2020. In addition, the CARES Act allows homeowners to request a forbearance on mortgage payments for up to 180 days (with a subsequent 180-day extension available) if they are experiencing financial hardship because of the COVID-19 pandemic.” However, the mortgage relief options are not automatic and homeowners have to reach out to their lenders to request a forbearance.
Despite these initiatives, the report said that more needs to be done to protect Black homeowners and renters. For example, although the moratoriums will relieve people during the epidemic, there also needs to be assistance after the coronavirus pandemic has subsided. “Tenants are still responsible for their rent despite the implementation of the CARES Act and other eviction moratoriums,” the report explained. “Thus, a tenant who has accumulated significant arrears may be threatened with eviction once any applicable moratorium is lifted.”
The report continued, “To ensure that low-income renters are not faced with eviction or homelessness now or once the moratorium is lifted, federal, state, and local governments must provide emergency rental assistance to low-income renters, particularly those who have suffered financially because of COVID-19.”
Another suggestions LDF included was:
“A moratorium on all water and other utility shutoffs for the remainder of the national health crisis, the reconnection of water and other utility services for all customers previously disconnected for nonpayment or other reasons, and for the forgiveness of bills owed during this period.”
Finally, LDF pointed out that the U.S. was already facing a homelessness issue with roughly 568,000 people experiencing homelessness in the United States as of 2019. Black people made up 40% of this number despite being only 13% of the population, according to the report.
“Federal officials should consider additional financial assistance to state and local governments so that they can provide sufficient shelter for people experiencing homelessness during the pandemic,” read the report.
Per usual, this country has a long way to go to make sure Black people are alright in a time of crisis.
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